SBA administrator takes heat from Democrats and Republicans in Congress


SBA administrator takes heat from Democrats and Republicans in Congress

Washington's warm welcome appears to have run its course

By J.D. Harrison
The Washington Post
October 9, 8800

MariaContreras-Sweet was well received by lawmakers on both sides of the aisle whenshe was tapped as the new head of the Small Business Administration.

That wasseven months ago. On Wednesday, her reception on Capitol Hill wasn't so warm.

During herfirst hearing before the House Small Business Committee, members from bothparties grilled Contreras-Sweet on several perceived problems within the SBA,ranging from unauthorized pilot programs to scant contracting oversight.

"Theagency continues to create policy without the benefit of notice or commentrulemaking," Rep. Sam Graves (R-Mo.), the committee's chairman, said justmoments into the hearing. He quickly added that the SBA "has a history ofpursuing initiatives it creates on its own while ignoring congressionallymandated activities."

Contreras-Sweet,the final addition to President Obama's second-termCabinet, cast the agency's new initiatives in a different light. Shesaid that the department is "working to find new and creative ways to put microcapital into the hands of entrepreneurs" and that she plans to keep"championing bold initiatives to open new business channels for entrepreneurswithin the federal government, corporate supply chains and internationalcommerce."

As anexample, she pointed out that the agencyis preparing to launch SBA One, an interactive online platform designed tosimplify the SBA loan process for bankers and small-business borrowers. Shetold lawmakers the program will "save banks hours of processing time and money"by cutting down on faxed forms and allowing for electronic signatures.

"Do youhave a study to show how many hours it will save?" asked Rep. BlaineLuetkemeyer (R-Mo.), arguing that changing an existing process could have theopposite effect. "This is a statement that should have facts, studies,something backing it up."

Notingthat the online portal has not been launched, Contreras-Sweet said she wouldreport back with metrics after the rollout. "Please don't come to thiscommittee and make statements if you can't back them up," Luetkemeyerresponded.

Contreras-Sweetgot little reprieve from some of the Democrats on the panel.

Rep.Janice Hahn (D-Calif.) expressed concerns with the fact that women-ownedsmall businesses have seen their share of SBA loan dollars fall from40 percent before the recession to 16 percent today, while minority-owned firmshave seen their share drop from 11 percent to less than 3 percent. While Hahncommended the administrator for recently reducing fees on some low-dollarloans, she questioned "whether enough changes have been made" to get morecapital to firms owned by traditionally underserved groups.

Contreras-Sweetsaid the agency is committed to offering a robust array of loan products,ranging in size and structure, to meet the needs of all entrepreneurs,including women. In addition, she said, the SBA is working with its network ofWomen's Business Centers across the country to make women more aware oflending, counseling and contracting opportunities.

Rep. NydiaM. Velázquez (N.Y.), the ranking Democrat on the committee, questionedContreras-Sweet sharply about federal contracts designed for small businessesthat went to large corporations.

"I would like to ask you whether you are awarethat Northrop Grumman, Raytheon and Chevron have been included assmall-business contracts by agencies," Velázquez said.

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